1. Environmental Quality Service Council IDEM Report – August 27, 2008 Thomas W. Easterly, P.E., DEE, QEP Commissioner, Indiana Department of Environmental Management

2. Mission and Environmental Goal IDEM’s mission is to implement federal and state regulations to protect human health and the environment while allowing the environmentally sound operations of industrial, agricultural, commercial and government activities vital to a prosperous economy. IDEM’s goal is to increase the personal income of all Hoosiers to the national average while maintaining and improving Indiana’s environmental quality. 2 We Protect Hoosiers and Our Environment

3. How is IDEM Protecting Hoosiers and Our Environment? Clear, consistent and speedy decisions Clear regulations Assistance first, enforcement second Timely resolution of enforcement actions Current, valid permits for every regulated entity without unnecessary requirements Written Standard Operating Procedures Improved staff training and development 3 We Protect Hoosiers and Our Environment

4. Performance Metrics June 2005 4 We Protect Hoosiers and Our Environment

5. Performance Metrics June 2008 5 We Protect Hoosiers and Our Environment Quality of Hoosiers' EnvironmentResultTargetComments % of Hoosiers in counties meeting air quality standards 77%100%80% 3 counties @ 1,458,022 of 6,271,973 failed % of CSO Communities with approved programs to prevent the release of untreated sewage 72%100%20%64+9 (73) out of 98+9 (108) Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute Land 25,45266,56586,864 225 permits 370 permits 45 permits Air 123,628207,000385,000 Water 30,07248,000200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards Inspections 95.76%97%75% Self reporting 97.35%99%95% Continuous monitoring (COM) 99.64%99.90%98.95% * Tracks observations and not just inspections Organizational Transformation Budgetary agency dollars spent on key outside contracts for core agency functions. Dollars spent on outside services per year $2,800,000$0$3,447,017 $1,5 OLQ + $1.3 OAQ

6. New Drinking Water Metric Percent of Hoosiers Drinking Safe Water – Percentage of Indiana population that receives drinking water from facilities that are in full compliance with safe drinking water regulations – Federal (EPA) Goal is 90% 6 We Protect Hoosiers and Our Environment

7. Total Permit Calendar Days 7 We Protect Hoosiers and Our Environment

8. Air Permitting Rapid Improvement Activities Significant Source Modification Lean Event – October 2007 Permit Renewal Process Lean Event – December 2007 Teams consisted of internal and external stakeholders 8 We Protect Hoosiers and Our Environment

9. Significant Source Modification Results Items MeasuredCurrentNew% Change # of Steps16414412.2% # of Handoffs412929.3% # of Decisions161225% # Loop backs13838.5% # of Value- Added Steps 660 Lead Time195 – 255 days120 – 166 days38.5% - 34.9% Delays312422.6% 9 We Protect Hoosiers and Our Environment Status (avg) : 2/1/08 170 days / 4/1/08 154 days / 6/1/08 124 days

10. Air Permit Renewals Process Improvement Goal: eliminate backlog in 2008 (156 permits administratively extended) Backlog reduced to 51 = 67% (7-31-08) Permit renewals now consistently issued prior to expiration 10 We Protect Hoosiers and Our Environment

11. Attainment Status 11 Ozone PM 2.5 We Protect Hoosiers and Our Environment

12. Revisions to NAAQS for Ozone March 12, 2008 U.S. EPA published revision to 8-hour Ozone Standard Air Quality Index (AQI) also revised to reflect change in health standard Old Standard 0.08 ppm, effectively 0.084 due to rounding conventions New Standard 0.075 ppm 12 We Protect Hoosiers and Our Environment

13. 13 New Ozone Standard at 0.075 ppm Designations will likely be made in 2010 based on 2007-2009 data We Protect Hoosiers and Our Environment

14. PM 2.5 Status New 35 microgram per cubic meter 24 hour standard issued in September 2006—annual standard retained Preliminary designations were based on 2005-2007 air quality, but process will allow use of 2008 monitoring data New nonattainment designations will likely be made April 2009, SIPS due 2012 SIPS for current nonattainment areas were submitted in 2008—two redesignation petitions submitted (SW Indiana, NW Indiana) 14 We Protect Hoosiers and Our Environment

15. 15 Indiana final recommendations for 24-hour PM 2.5 nonattainment areas Designations will likely be effective in April 2009 We Protect Hoosiers and Our Environment

16. 16 We Protect Hoosiers and Our Environment EPA preliminary recommendations for 24-hour PM 2.5 nonattainment areas

17. US Courts Overturning Rules 2006—Industrial, Commercial and Institutional (ICI) Boiler MACT—directly impacted about 10 sources with coal fired boilers May 2008—Clean Air Mercury Rule (CAMR) impacted all power plants July 2008—Clean Air Interstate Rule (CAIR) impacted all power plants and most Indiana air pollution strategies 17 We Protect Hoosiers and Our Environment

18. BP Air Permit 38 day public comment period, 342 written comments received Public meeting and hearing – 1,200 attended, 44 commented Construction permit issued May 1 and operation permit issued June 16 Multiple appeals of these permit decisions to OEA, Federal Court and the EPA Administrator 18 We Protect Hoosiers and Our Environment

19. NRDC Statement on Tar Sands “BP’s decision to tap into the Canadian wilderness is ‘based on addiction, not reality,’ says Ann Alexander, senior attorney at the Natural Resource Defense Council (NRDC), a nonprofit environmental group. ‘Tar sands crude oil is dirty from start to finish. It’s bad enough that [BP is] fouling our natural resources here in the Midwest, but it’s completely destroying them up in Canada. There are good sources of energy we can turn to that don’t involve turning entire forests into a moonscape.’” 19 We Protect Hoosiers and Our Environment

20. Duke-Edwardsport Power Plant First commercial Integrated Gasification Combined Cycle (IGCC) plant in the U.S. 44 day public comment period Public meeting and hearing – over 600 citizens attended Construction permit issued January 25 and operation permit issued in March Permit decision appealed 20 We Protect Hoosiers and Our Environment

21. Combined Sewer Overflows 65 communities now have approved Long Term Control Plans (LTCPs) 12 communities took action to control CSOs without the need of a LTCP – separated sewers or overflow prevention measures 77 of 107 communities are adequately addressing their CSOs 30 CSO LTCPs left to approve 21 We Protect Hoosiers and Our Environment

22. 22 Permit Backlog Reduction In 2005, there were 263 administratively extended NPDES permits Six of those 263 remain to be issued: – US Steel Gary Works – US Steel Midwest Division – Arcelor Mittal Indiana Harbor East – Arcelor Mittal Indiana Harbor West – Arcelor Mittal Burns Harbor – Hoosier Energy Merom Plant We Protect Hoosiers and Our Environment

23. Flood Update IDEM staff logged 1,218 hours of support time Assisted DNR with early evacuations Contacted 541 drinking water and wastewater facilities; provided 63 with FEMA reimbursement assistance Offered debris management and spill response assistance to local officials 23 We Protect Hoosiers and Our Environment

24. Flood Update Continued Coordinated outreach to livestock operations Coordinated with U.S. EPA to address solid and household hazardous waste management issues and assess hazardous spills Provided communication outreach including severe weather website, FAQ document, four fact sheets and three news releases 24 We Protect Hoosiers and Our Environment

25. Dr. Barnes BP NPDES Permit Review BP NPDES permit issued June 21, 2007 after extensive public outreach and no apparent opposition Negative and misleading media resulted in uproar from public, politicians, etc. Governor Daniels requested Barnes review August 13, 2007 Report issued December 3, 2007 25 We Protect Hoosiers and Our Environment

26. Dr. Barnes Conclusions Permit complies with existing regulations and fully protects drinking water, recreation and aquatic life Permit is more restrictive and protective of Lake Michigan than required by adjoining states Indiana should clarify antidegradation regulations for permit applicants and public to understand and the agency to apply 26 We Protect Hoosiers and Our Environment

27. IDEM Response Updating Indiana Antidegradation regulations – Will apply to entire State – Special protection for Lake Michigan Require more documentation for compliance schedules Obtain U.S. EPA non-objection determination prior to public notice of NPDES permit 27 We Protect Hoosiers and Our Environment

28. Mercury Switch Removal Currently 401 Indiana participants 32,060 mercury switches collected 70.53 pounds of mercury removed from end of life vehicles 28 We Protect Hoosiers and Our Environment IC 13-20-17.7-2

29. Land Quality Accomplishments All 1,269 tons of VX Agent stored at the Newport Chemical Agent Facility since 1969 has been safely destroyed. VX destruction started in May of 2005 and was completed in August 2008 Digital Inspector Tool is in use for solid waste inspections including CFOs, CAFOs and auto salvage yards 29 We Protect Hoosiers and Our Environment

30. Agency Initiatives Virtual File Cabinet—electronic filing system, over 27,000,000 pages now available electronically, IDEM file room visits down over 90% from 445/mo 1Q 2007 to 35/mo 2Q 2008 TEMPO—Enterprise wide electronic integration of all IDEM information, part of the process to allow us to receive and process electronic permit applications and reports Applied for EPA approval for electronic submittals 30 We Protect Hoosiers and Our Environment

31. Percent of Activities Meeting Regulations 31 We Protect Hoosiers and Our Environment

32. Office of Enforcement 200320042005200620072008* Referrals607467547591606189 Violation Letters5,2224,9804,2684,0243,95811** Notices of Violation457318202427420178 Agreed Orders349314258417372185 Commissioner’s Orders15641383912 Dismissals1214448465720 Complies/Closed308312317577568214 AG Referrals13174335210 32 *through 2 nd quarter **Does not include Program Violation Letters We Protect Hoosiers and Our Environment

33. Office of Enforcement 20042005200620072008* Assessed Penalty$2,979,415$2,273,688$7,758,749$5,249,249$1,404,833 Cash Penalty$2,710,174$2,087,244$3,509,974$4,930,988$1,350,724 SEP Offset$393,586$212,354$4,111,655$337,915$276,661 33 *through August 2008 We Protect Hoosiers and Our Environment

34. Criminal Convictions Wabash Environmental Technologies and Derrik Hagerman—Clean Water Act felonies. Sixty months of imprisonment and $237,000 in restitution (Terre Haute) Miller Environmental and Anthony MuCullough—Clean Water Act felonies. Four months imprisonment and $510,000 in penalties (Shelbyville and Rushville) 34 We Protect Hoosiers and Our Environment

35. Criminal Convictions Richard Reece—RCRA felonies. Six months in half way house, six months home detention and $60,000 restitution (Muncie) Hassan Barrel and Alan Hersh—RCRA felonies. Awaiting sentencing (Fort Wayne) 35 We Protect Hoosiers and Our Environment

36. Forbes “America’s Greenest States” Report “So who’s at the bottom? Mississippi, Louisiana, Alabama, Indiana and, at No. 50, West Virginia. All suffer from a mix of toxic waste, lots of pollution and consumption and no clear plans to do anything about it. Expect them to remain that way.” 36 We Protect Hoosiers and Our Environment

37. Forbes Report Conclusion Does not rank States based upon government verified environmental quality data Appears to be a ranking based upon adherence of States to a group of policies advocated by the NGO’s providing information used in the rankings 37 We Protect Hoosiers and Our Environment

38. Possible 2009 Legislative Issues Discuss public’s expectations at property transfers and related programs – Restrictive Covenant – Define oversight and recovery, owner/operator and other technical language Clean up several statutes to match operational efficiencies 38 We Protect Hoosiers and Our Environment

39. Questions? Megan Tretter Legislative & Business Liaison 317-234-3386 mtretter@idem.in.gov Sandra Flum Intergovernmental Relations 317-233-9479 sflum@idem.in.gov 39 We Protect Hoosiers and Our Environment